Finance is part of Accounting and Finance and holds 1,041 questions with answers, free to read and with no account needed.
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Answer: A. principle and interest
A financial guarantee legally ensures that a lender will be fully paid both principal and interest. Guarantors step in to fulfill debt obligations if the primary borrower defaults on payments. Lending agreements rely on...
Answer: C. return on common equity
Return on common equity is calculated by dividing net income available to common stockholders by common equity. This financial metric measures the profitability generated by the money invested by common shareholders. A h...
Answer: A. Interest rate-tax savings
The after-tax cost of debt is calculated by subtracting tax savings from the interest rate. Interest payments on corporate debt are typically tax-deductible, lowering the effective borrowing cost. Financial analysts adju...
Answer: B. modified internal rate of return
The modified internal rate of return equates the present value of a project's terminal cash flows to its cost. This financial metric resolves reinvestment rate assumption flaws found in traditional internal rate of retur...
Answer: A. Financial management
Financial management focuses on asset acquisition, financing, and management directed toward a broad overarching objective. Corporate financial managers evaluate investment projects to ensure they increase overall firm v...
Answer: B. Premium bond
A bond trading above its par value is priced at a premium and is called a premium bond. Market interest rates dropping below the coupon rate cause bonds to trade at a premium. Investors pay more than face value for a bon...
